Magnetar Technologies Corp. v. Six Flags Theme Park Inc.
886 F. Supp. 2d 466
D. Del.2012Background
- Patent infringement action over U.S. Patent No. 5,277,125 brought by SBC, Magnetar, and G&T against Six Flags.</br>Acacia licensed the patent to Magnetar and G&T; SBC holds exclusive license via Acacia to enforce the patent.
- Acacia, Magnetar, and G&T formed a relationship with Connolly Bove to represent multiple parties in the litigation and licensing arrangements.
- Zelley of Connolly Bove conducted an on-site Luna Road probe into the patent’s public use and reduced-to-practice, reporting observations including public demonstrations.
- Zelley memorandum documented Luna Road findings and was produced in later investigations, raising allegations of concealment of invalidity and non-disclosures.
- Documents were destroyed or disposed of from a BAE-held storage facility, prompting spoliation and privilege disputes, while California proceedings addressed related issues.
- Court previously ruled on privilege aspects concerning the Zelley memorandum and set limits on depositions; multiple privilege issues remained for determination in this action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of attorney-client privilege due to third-party disclosure | Acacia’s production operated as a waiver | Disclosures were inadvertent; joint privilege may apply | Waiver determined by seven-factor analysis; not automatic; partial waiver limited by joint privilege and work product protections |
| Work product protection waiver due to production to Acacia | Connection to joint defense preserves protection; production not a waiver | Production to third party shows conscious disregard | Connolly Bove retains standing; Acacia's production does not extinguish work product for Connolly Bove |
| Existence and scope of the joint privilege | Joint representation among Acacia, Magnetar, and G&T; communications protected | Joint privilege terminated on divergence; waiver by any party possible | Joint privilege exists; cannot be unilaterally waived by Acacia; production did not destroy joint privilege for Magnetar and G&T |
| Standing to assert work product protection | Connolly Bove may assert its own work product protection | Attorney cannot be overridden by client’s disclosure; standing disputed | Connolly Bove has standing; production did not extinguish its work product protection |
| Spoliation sanction and scope of production | Destruction of BAE documents prejudices Six Flags; sanctions warranted | Destruction was routine, not aimed to prejudice; lesser sanction acceptable | Spoliation found; sanctions include production of eight documents, with selective redactions consistent with protecting work product; other items to be returned or produced as directed |
Key Cases Cited
- In re Teleglobe Communications Corp., 493 F.3d 345 (3d Cir. 2007) (privilege and work product interplay; joint privilege considerations)
- Schmid v. Milwaukee Electric Tool Corp., 13 F.3d 76 (3d Cir. 1994) (sanctions and spoliation standards; fault and prejudice factors)
- Hercules, Inc. v. Exxon Corp., 434 F. Supp. 136 (D. Del. 1977) (work product protection and waiver distinctions; attorney vs. client privileges)
- Gumbs v. International Harvester, Inc., 718 F.2d 88 (3d Cir. 1983) (scope of privilege and disclosure implications in multi-party context)
- United States v. Cherkasky Meat Co., 259 F.2d 89 (3d Cir. 1958) (early considerations of privilege and disclosure in third-party contexts)